Stock Plans

The Company utilizes one stock-based compensation plan, the 2009 Incentive Plan (the “2009 Plan”). Under the 2009 Plan, 10.0 million shares of the Company’s common stock, as well as shares of the Company’s common stock previously granted under the Amended and Restated 2001 Incentive Plan and the 2005 Incentive Plan that were cancelled or forfeited without the shares being issued, are authorized for stock option grants, restricted stock awards, performance units and stock grants as part of the Company’s compensation programs (the “Plan”).

The following table summarizes total pre-tax compensation expense recognized related to the Company’s stock options, restricted stock, restricted stock units, performance units and stock grants, net of estimated forfeitures, included in the Company’s condensed consolidated statements of operations for the three months ended April 1, 2012 and April 3, 2011:



	Three Months Ended
	April 1, 2012		April 3, 2011
	(In thousands)
Cost of revenue	$	276	$	260
Research and development expenses	176		146
Selling, general and administrative expenses	5,024		2,648
Total stock-based compensation expense	$	5,476	$	3,054

The total income tax benefit recognized in the condensed consolidated statements of operations for stock-based compensation was $1.9 million for the three months ended April 1, 2012. The total income tax benefit recognized in the condensed consolidated statements of operations for stock-based compensation was $1.0 million for the three months ended April 3, 2011. Stock-based compensation costs capitalized as part of inventory were $0.3 million and $0.2 million as of April 1, 2012 and April 3, 2011, respectively. The excess tax benefit recognized from stock awards, classified as a financing cash activity, was $1.1 million and $7.8 million for the three months ended April 1, 2012 and April 3, 2011, respectively.

Stock Options: The fair value of each option grant is estimated using the Black-Scholes option pricing model. The Company’s weighted-average assumptions used in the Black-Scholes option pricing model were as follows:



	Three Months Ended
	April 1, 2012		April 3, 2011
Risk-free interest rate	0.6	%	1.9	%
Expected dividend yield	1.2	%	1.1	%
Expected lives	4 years		4 years
Expected stock volatility	38.7	%	38.1	%

The following table summarizes stock option activity for the three months ended April 1, 2012:



	Number of Shares		Weighted- Average Price		Weighted-Average Remaining Contractual Term	Total Intrinsic Value
	(In thousands)				(In years)	(In millions)
Outstanding at January 1, 2012	5,346		$	20.57
Granted	686		26.15
Exercised	(521	)	18.22
Canceled	(203	)	22.21
Forfeited	(4	)	12.95
Outstanding at April 1, 2012	5,304		$	21.46	4.0	$	22.5
Exercisable at April 1, 2012	3,655		$	20.28	3.0	$	19.2
Vested and expected to vest in the future	4,843		$	21.46	4.0	$	20.5

The weighted-average per-share grant-date fair value of options granted for the three months ended April 1, 2012 was $7.32. The weighted-average per-share grant-date fair value of options granted for the three months ended April 3, 2011 was $7.81. The total intrinsic value of options exercised for the three months ended April 1, 2012 was $4.3 million. The total intrinsic value of options exercised for the three months ended April 3, 2011 was $5.1 million. Cash received from option exercises for the three months ended April 1, 2012 and April 3, 2011 was $9.5 million and $18.0 million, respectively.

The total compensation expense recognized related to the Company’s outstanding options was $1.2 million for the three months ended April 1, 2012, and $1.1 million for the three months ended April 3, 2011.

There was $9.7 million of total unrecognized compensation cost, net of estimated forfeitures, related to nonvested stock options granted as of April 1, 2012. This cost is expected to be recognized over a weighted-average period of 2.4 fiscal years and will be adjusted for any future changes in estimated forfeitures.

Restricted Stock Awards: The following table summarizes restricted stock award activity for the three months ended April 1, 2012:



	Number of Shares		Weighted- Average Grant- Date Fair Value
	(In thousands)
Nonvested at January 1, 2012	672		$	23.62
Granted	349		25.83
Vested	(124	)	23.20
Forfeited	(8	)	25.15
Nonvested at April 1, 2012	889		$	24.53

The weighted-average per-share grant-date fair value of restricted stock awards granted during the three months ended April 1, 2012 was $25.83. The weighted-average per-share grant-date fair value of restricted stock awards granted during the three months ended April 3, 2011 was $26.45. The fair value of restricted stock awards vested for the three months ended April 1, 2012 was $2.9 million. The fair value of restricted stock awards vested for the three months ended April 3, 2011 was $2.9 million. The total compensation expense recognized related to the Company’s outstanding restricted stock awards was $2.0 million for the three months ended April 1, 2012, and $1.4 million for the three months ended April 3, 2011.

As of April 1, 2012, there was $16.1 million of total unrecognized compensation cost, net of forfeitures, related to nonvested restricted stock awards. That cost is expected to be recognized over a weighted-average period of 1.9 fiscal years.

Performance Units: The Company granted 122,675 performance units and 89,828 performance units during the three months ended April 1, 2012 and April 3, 2011, respectively, as part of the Company’s executive incentive program. The weighted-average per-share grant-date fair value of performance units granted during the three months ended April 1, 2012 and April 3, 2011 was $26.18 and $26.71, respectively. The total compensation expense recognized related to these performance units was $2.2 million for the three months ended April 1, 2012, and $0.5 million for the three months ended April 3, 2011. As of April 1, 2012, there were 322,516 performance units outstanding and subject to forfeiture, with a corresponding liability of $5.7 million recorded in accrued expenses.

Stock Awards: The Company generally grants stock awards only to non-employee members of the Board. The Company granted 955 shares to a new non-employee member of the Board during the three months ended April 1, 2012. The Company did not grant any stock awards to non-employee members of the Board during the three months ended April 3, 2011. The weighted-average per-share grant-date fair value of stock awards granted during the three months ended April 1, 2012 was $26.18. The total compensation expense recognized related to stock awards was $0.03 million in the three months ended April 1, 2012. No compensation expense was recognized related to stock awards in the three months ended April 3, 2011.

Employee Stock Purchase Plan: During the three months ended April 1, 2012 and April 3, 2011, the Company did not issue any shares of common stock under the Company's Employee Stock Purchase Plan. At April 1, 2012, an aggregate of 1.2 million shares of the Company’s common stock remained available for sale to employees out of the 5.0 million shares authorized by shareholders for issuance under this plan.